The Pioneer Credit Ltd (ASX: PNC) share price has had a stunning start to the week.
In afternoon trade the Perth-based debt collector’s shares have returned from a trading halt and are up 20% to $2.36.
Why is the Pioneer Credit share price rocketing higher?
This morning Pioneer Credit requested a trading halt whilst it prepared a response to an article in the Australian Financial Review claiming that it was a takeover target.
An announcement out of the company this afternoon reveals that the article was on the money and Pioneer Credit has a number of suitors.
According to the release, the company has received several confidential, non-binding, indicative proposals.
The most comprehensive of these proposal is a non-binding, indicative proposal for the acquisition of all its issued shares by way of a scheme of arrangement.
Although no figures were put forward, management advised that it would be “at a material premium to the current share price.”
However, all the proposals are non-binding, indicative, and incomplete. They are also conditional on a number of items, including satisfactory completion of due diligence and board and regulatory approvals.
In addition to this, as the discussions are ongoing, management doesn’t regard them as sufficiently advanced enough to warrant further disclosure at this time.
As a result, it has warned shareholders that there is no certainty that any proposal will result in a binding and board-recommended offer and advised them not to take any action at this stage.
I think investors ought to heed the company’s advice and wait patiently for the situation to develop before taking any action.
In the meantime, if you’re looking for exposure to the industry you could consider buying the shares of debt collection giant Credit Corp Group Limited (ASX: CCP) or even Collection House Limited (ASX: CLH).
Alternatively, check out these buy-rated blue chip shares that could be even better options for investors.
Our Top 3 Blue Chip Shares for 2019 – NOW AVAILABLE!
You’re invited! For a limited time, The Motley Fool Australia is giving away an urgent new investment report detailing our 3 TOP BLUE CHIP SHARES to own in 2019.
So if you like trustworthy, stable, high-performing companies that pay fat fully franked dividends – we’ve got you covered!
Stock #1 is a beloved old Australian company turning its attention to high-margin businesses… and rapidly returning cash to shareholders with its hefty dividend…
While Stock #2 is an online powerhouse that’s rapidly gaining market share all around the globe… poised for years (or even decades) of tremendous growth…
Even better, Stock #3 offers a whopping 6.5% grossed-up dividend! Which beats the rates on term deposits right out of the water – and offers the potential for capital gains, too.
You can discover all three shares inside our new report right now. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a LIMITED TIME ONLY!
SimplyCLICK HERE FOR YOUR FREE REPORT!
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019